Could not upload SPFx package to some MS365 tenants

[xinzhaozhang1985]

Target SharePoint environment

SharePoint Online

What SharePoint development model, framework, SDK or API is this about?

💥 SharePoint Framework

Developer environment

None

What browser(s) / client(s) have you tested

• 💥 Internet Explorer
• 💥 Microsoft Edge
• 💥 Google Chrome
• 💥 FireFox
• 💥 Safari
• mobile (iOS/iPadOS)
• mobile (Android)
• not applicable
• other (enter in the "Additional environment details" area below)

Additional environment details

• browser version
• SPFx version
• Node.js version
• etc

Describe the bug / error

We have Azure pipeline to upload SPFx package to all of our MS365 tenants. We are using m365 cli and an app registration with application permission SharePoint Sites.FullControl.All to do it. The command is as below:

m365 spo app add --filePath "C:\Dev\xxxx.sppkg" --appCatalogUrl "https://xxxxxx.sharepoint.com/sites/appcatalog" --overwrite --debug

Since yesterday 16th July 2026 , some of our MS365 tenants start throwing error
"error": "{"odata.error":{"code":"-2130575223, Microsoft.SharePoint.SPException","message":{"lang":"en-US","value":"Must have Manage Web Site permissions in order to add apps to site collection app catalog"}}}"

Not sure if this is intended to stop application permission for uploading SPFx package to MS365 tenant even with the SharePoint Sites.FullControl.All permission.

Steps to reproduce

1. This only impact some of the MS365 tenants, maybe it is because per-tenant enforcement rollout
2. Create a app registration with assign SharePoint application permission Sites.FullControl.All, generate a certificate and upload to the app reg.
3. Consent the permission in a MS365 tenant
4. Build a SPFx package and save
5. m365 login --authType certificate --appId xxxxxxx --tenant xxxxx --certificateFile "C:\Dev\xxx.pfx" --password xxx --debug
6. m365 spo app add --filePath "C:\Dev\xxxx.sppkg" --appCatalogUrl "https://xxxxxx.sharepoint.com/sites/appcatalog" --overwrite --debug

Expected behavior

The SPFx failed to upload with error
"error": "{"odata.error":{"code":"-2130575223, Microsoft.SharePoint.SPException","message":{"lang":"en-US","value":"Must have Manage Web Site permissions in order to add apps to site collection app catalog"}}}"